Futures & Commodities

Gold firms on US protests, standoff with China

Andrew Rudakov | Bloomberg | Getty Images

Gold gained on Monday supported by increasing friction between Washington and Beijing and protests in the United States over racism, however, hopes of a potential vaccine to fight COVID-19 capped bullion's ascend.

Spot gold climbed 0.7% to $1,737.48 per ounce. Prices earlier rose 1% to hit an over one-week high of $1,744.19.

U.S. gold futures eased 0.1% to $1,750.20.

"There are growing concerns that the U.S.-China Phase One trade deal is about to get ripped-off," said Edward Moya, a senior market analyst at broker OANDA, adding widespread protests in the United States has raised concerns of another wave of coronavirus cases.

The dollar fell to its lowest since mid-March, further supporting bullion prices.

China has told state-owned firms to halt purchases of major U.S. farm products, after Washington said it would eliminate special treatment for Hong Kong.

Meanwhile in the United States, National Guard troops were deployed in 15 states and Washington, D.C. in an attempt to quell protests over the death of a black man in police custody.

Gold is seen as a safe-haven asset during times of political and economic uncertainty.

However, capping bullion's gains was optimism over potential COVID-19 vaccine and easing lockdowns, which underpinned world stocks near three-month highs.

On the technical side, "the spot price is now getting close to resistance placed at $1,750. A clear climb above the previous highs ($1,747 on closing and $1,765 intraday) would open space for further rallies," ActivTrades chief analyst Carlo Alberto De Casa said in a note.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose to a fresh seven-year high on Friday.

Elsewhere, silver gained 2% to $18.20 per ounce, having touched its highest since Feb. 25 earlier.

Palladium rose 1.1% to $1,966.18 per ounce, and platinum was 1.7% higher at $852.18.